Protest of Army Contract Award

B-198670: Nov 18, 1980

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A firm protested the award of a contract to a second firm, contending that the awardee had misrepresented itself as a small business when, in fact, it was a large business concern. The bid of the protester was declared ineligible because it stated its firm was a large business concern. The request for proposals (RFP) was a total small business set-aside for the rental of automatic washers and dryers, including installation and maintenance. The Army argued that the protester was not an interested party under bid protest procedures. The Army further argued that the protest should be denied because the certification by the awardee that it was a small business was made in good faith, and that the present stage of performance now makes it impractical for the contract to be terminated and the requirement resolicited. According to the protester, its bid was submitted in order to inform the Army of the price at which the equipment and services could be procured so that an evaluation could be made as to whether the small business set-aside price offers were reasonable. This makes the firm an interested party for the purposes of the protest. The protester also argued that the set-aside contract was invalid because the contracting officer lacked the authority to make the award. The firm contended that the Army improperly invoked the authority set forth in a Defense Acquisition Regulation that provides that a contracting officer need not release the identity of the apparently successful set-aside awardee in a negotiated procurement in any urgent procurement which must be awarded without delay to protect the public interest. Even though the award date was 3 weeks before the commencement date of the contract, it is not the view of GAO that this affected the urgency determination because of the leadtime necessary to obtain and install the quantities of washers and dryers involved. Thus, the validity of the award cannot be questioned under the cited DAR provision. The Army has informed GAO that the awardee has incurred the majority of the costs of performance of this contract and that termination for the convenience of the Government would not be in the best interest of the Government. GAO cannot question the position of the Army that termination for convenience would be contrary to the best interest of the Government, given the status of the contract. Moreover, the Army has informed GAO that it will not exercise the options of the contract.